> … Bank owners do everything they possible can to avoid failing and being "bailed out". Might be true. But everything they can is not enough. First, there’s

> … Bank owners do everything they possible can to avoid failing and being "bailed out". Might be true. But everything they can is not enough. First, there’s the principal-agent problem: the owners (aka share holders) can not fully control managers or staff in general. Second, the goals of an organization do not necessarily align with the goals of the individuals that contribute to the organization. For example, young bankers who know that they will switch jobs some time will work differently than those who also own the bank. So usually there’s a bias towards more short-term profit and higher risk. Also for the bank as a whole there’s a bias towards risk because they have to compete with other banks. If I’d be a well-intentioned CEO I would still be forced into that behavior because otherwise I would simply be fired or the bank would lose against other banks.